Israeli Foreign Minister Shimon Peres said he welcomes Yasser Arafat's proposal for a meeting, although he did not elaborate about a possible location for any talks.

Mr. Arafat told reporters in the West Bank town of Ramallah after a meeting with German Foreign Minister Joschka Fischer Tuesday, that he is prepared to meet the Israeli foreign minister in Berlin.

Mr. Peres said in Budapest that he hopes the meeting will lead to an end of the Palestinian uprising, known as the intifada, and 11 months of bloodshed. "I feel that with words we can reach much more than with bombs," Mr. Peres said. "And I think that the intifada is costly not only to Israel but also to the Palestinians. And we would like to bring an end to the suffering as soon as we can."

Foreign Minister Peres, who was on a one day visit in Hungary, suggested to reporters that he wants to schedule the talks with the Palestinian leader as soon as possible. "I intend to see him in the near future," Mr. Peres said. "I think when I went to Budapest, he went to Beijing. So when we return home, we shall try to organize a meeting."

Mr. Peres also discussed the Middle East crisis with Hungarian government officials, including Foreign Minister Janos Martonyi.

The Israeli foreign minister suggested he has a special relationship with Hungary, explaining that Budapest was the birthplace of Theodor Herzl, a founder of the Zionist movement - which led to the creation of the Jewish state - and which Mr. Peres said changed the course of Jewish history.

Hungary was also the first East European country to recognize Israel after the collapse of Communism.

Foreign Minister Peres urged Hungary and other European countries to play a more active role in the Middle East peace process.

He also said that improved U.S. European relations will help in fighting terrorism. "I feel that today there is an easier relationship between the United States and Europe," Mr. Peres said. "It is no longer as confrontational as it used to be in the past. And I feel that there is an attempt to have a united line concerning terror, where Russia joins in and others."

Mr. Peres said there can only be a political - and no military - solution to the problems in the Middle East, which he hopes all sides will soon recognize.